Fraudgate

The High Court case in which Bank of Botswana (BoB) is seeking to overturn a default judgment against it kicked off with all the related drama this week. An early morning session started with Bank of Botswana lawyers Collins Newman & Company, presenting their case, before EBC Gurnsey replied represented by Minchin & Kelly, climaxing with a damaging ruling for Collins Newman, delivered by High Court Judge, Justice Zein Kebonang. Kebonang said the fraud allegations which have been leveled against Collins Newman lawyer, Bokani Machinya are of a serious nature, and have to be put to a full court process. Collins Newman are facing allegations of forgery as the Bank of Botswana, is seeking to stop EBC Guernsey from attaching the state bank’s property to reclaim a P27m debt arising out of the winding down of the defunct Kingdom Bank. The law firm has been accused of forging a High Court stamp in order to submit papers after the designated deadline. 

Kebonang charged, “the integrity of the judiciary will be compromised if the Court was to ignore such strong allegations of wrong doing. It would in fact amount to aiding and abetting a potential wrong”. In the Bank’s application to have the default judgment set aside, Advocate Chris Loxton spent the better part of the morning seeking to distance the law firm and the Bank from Machinya. BoB lawyers argued that the default judgment had been granted by The Registrar without legal authority to do so, and Loxton added that the court did not have to consider whether such fraud occurred in order to determine whether the judgment was legal. Loxton said even if wrongdoing was found on the part of the lawyers, Bank of Botswana should not be punished for the misdemeanors of the lawyer. 

One exchange illuminated the exchange when Kebonang asked, “Are you attempting to circumvent facing the allegations of fraud?” Loxton replied, “No, they are very serious allegations. The fraud matter can be referred to relevant authorities, whether police or other bodies tasked with such responsibilities,” adding, “I don’t act for the attorney concerned but the Bank of Botswana”. He pleaded with the court not to punish the BoB for the action of its lawyer. 

“But the bank chose its lawyer,” retorted the judge.

Of particular interest to the judge, both during the course of arguments, and later in his judgement, were the contradictory statements that came out of the BoB’s legal team. At first, Deputy Governor, Moses Pelaelo, in his founding affidavit, argued that the default judgement had been granted illegally because Bank of Botswana had filed its papers on time. However, Pelaelo later submitted another affidavit, this time arguing that the bank had not submitted its papers on time, blaming Machinya for the mishap. Indeed, over the initial few months, Collins Newman’s legal positon was that they had submitted on time, only abandoning the position later in the build-up to the court hearing the case. 

An official of the High Court, Deputy Registrar, Bafila Nlanda, who wrote a letter attesting to the validity of the submission by Collins Newman, also got a beating from the judge in his judgement. “Nlanda is an employee in the Administration of Justice. On perusal of the record, Nlanda was not the original officer who dealt with the matter. He cannot attest to anything as being his personal knowledge without infringing the hearsay rule,” concluded Kebonang. 

In the afternoon, in their response, Advocate Stais arguing for ECB Guernsey, maintained that the court had to address the issue of whether any fraud had been committed. Stais avoided delving into the argument of whether the Registrar had issued the default judgment within his powers, adding instead that the court should be left to consider how to proceed once it had decided on whether any fraud had been committed. “They are asking you (Kebonang) to not deal with the most important matter, the very serious allegations of fraud,” he warned. Stais argued that any determination may come out of the initial enquiry into the allegations of fraud. “If the court can find that no appearance to defend was filed, and that fraud was done, then the court has discretion to deal with the case in a way it may determine,” he argued. 

Stais said he could not find a reason why Bank of Botswana would be opposed to the investigation of fraud. “There is no reason other than self-serving financial interests against the interests of justice and integrity of the judiciary that this court cannot determine this fraud issue,” concluded Stais. 

Kebonang scheduled the case around fraud allegations for October. This therefore means Minchin & Kelly have won round one, having convinced the court to take time to explore the fraud allegations against Collins Newman. However, when this chapter is closed, Kebonang will attend to the other serious matter of whether the default judgment against the Bank of Botswana should be upheld.